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Weekly Review: Stock market remained volatile

The stock market remained volatile throughout the week and finally saw the KSE-100 index close down by 368 points (0.74 per cent) to barely cross the 49,000 level at 49,008.
After testing the high level of 49,597 points early in the week, the index could not breach the 50,000 levels amid choppy trades. Major contributors towards the volatility were the Panama Papers case hearing, deterioration of law and order situation, concern over tighter regulations and selling pressure due to rollover week.
As investors’ decided to remain on the sidelines, average trading volume declined by 9pc week-over-week (WoW) to 328 million shares where K-Electric Ltd trading in 30.3m shares, ASL 23.4m, POWER 21.4m and TRG 13.3m shares remained the volume leaders.
Foreigners were net sellers of $4.8m during the week against buying of $4.2m the previous week. Major buying was witnessed in fertilizer sector and banks while power generation and distribution sectors saw major foreign outflows. Among local participants, mutual funds remained net buyers of $26.7m worth of stocks during the week. Sector-wise, cements made positive contribution of 77 points while the big banks, UBL, HBL and MCB followed with contribution of 44 points.
On the flip side, primary laggard was fertiliser sector in which DAWH shed 76 points, Hubco 47 points and FFC 39 points. Engineering sector declined 5.7pc WoW amid steel importers’ filing a petition against NTC’s recently imposed duty on CRC, which was re-scheduled to March 10. Telecom (down 3.4pc week-on-week). Stock market also took direction from ongoing results announcements wherein selective stocks were in investors’ focus.
According to Intermarket Securities, DAWH lost 7.58pc, HUBC 2.35pc, FFC 2.59pc, HASCOL 8.42pc and ISL 6.95pc, which together took away 230 points.
On the flip side, UBL gained 2.75pc, ENGRO 3.16pc and NESTLE 5pc added 160 points. Other major brokerage house counted HASCOL 8.42pc, DAWH 7.58pc, AGTL 7.09pc and ASTL 5.29pc among major losers.
HMB gained 4.97pc, MTL 4.20pc, PIOC 3.72pc and SSGC 3.66pc, were principal laggards.
OUTLOOK: In the upcoming week, several analysts expect volatility to subside a little as the future rollover week has come to an end. Investors’ sentiments would continue to be guided by the developments on the Panamagate verdict, the control over the recent spate of terrorist incidents and further regulatory actions. In the medium term, MSCI reclassification in May, completion of PSX divestment by June, foreign fund inflows and visible developments in CPEC are reckoned to be likely triggers.